Statutory university affiliation is not a taxable service where no commercial quid pro quo exists.

Affiliation and renewal of affiliation by a university were treated as statutory functions under the governing education law, not as commercial activities performed for consideration. On that basis, the element of reciprocal contractual service and quid pro quo required for a taxable service was absent, so affiliation fees were not liable to service tax. Notification No. 25/2012 was also relied on as supporting the non-taxable character of the activity. The issue was stated to be covered by the cited High Court ruling, and no distinguishing facts were found, so the departmental appeal failed.

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Issues: Whether affiliation fees received by the University were liable to service tax.

Analysis: Affiliation and renewal of affiliation were held to be functions discharged under the governing educational statute and not activities carried on in a commercial field for consideration. The reasoning proceeded on the statutory meaning of service, the need for an activity performed for another for consideration, and the absence of the contractual reciprocity and quid pro quo ordinarily associated with taxable services. The exemption under Notification No. 25/2012 was also treated as supporting non-taxability. The issue was covered by the cited High Court ruling, and no distinguishing fact was found.

Conclusion: Affiliation fees were not liable to service tax, and the departmental appeal failed.

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